My Favorite Bit: M. K. Hobson talks about THE WARLOCK’S CURSE

THE YEAR IS 1910. Eighteen-year-old Will Edwards has landed a prestigious apprenticeship at Detroit’s Tesla Industries, the most advanced scientific research center in the United States. It’s a plum prize for a young man who dreams of a career in the new science of Otherwhere Engineering.

But his father doesn’t want him to go. And he won’t tell him why.

Determined to get there by any means necessary, Will finds unexpected support along the way. His old friend Jenny Hansen—daughter of a San Francisco timber baron—is eager to help him for reasons of her own. And so is his estranged brother Ben, who he hasn’t seen in over ten years.

But running away turns out to be the easy part. On the first full moon after his eighteenth birthday, Will is stricken by a powerful magic—a devastating curse laid upon his ancestors by the malevolent sangrimancer Aebedel Cowdray. Will must find a way to control the magic that possesses him—or the vengeful warlock’s spirit will destroy everything and everyone he loves.

M. K. HOBSON:

One of my pet fascinations is money. In my office I have a whole bookshelf of tomes on the history of currency and monetary theory, interspersed with several exceptionally ripe volumes of conspiracy literature on the Federal Reserve, fiat money, and Roosevelt’s gold grab of 1933. I was even an Economics major in college … that is, before I decided I could never be happy in a career that involved actual math and switched my major to that wretched refuge of scoundrels and slackers: Marketing.

But, despite having thus consigned myself to such an ignominious fate, I never lost my fascination with topics economical. And in The Warlock’s Curse I was able to put much of this fascination into the character of Jenny Hansen, a budding entrepreneur. Which leads me to my favorite bit in the b00k. Through Jenny, I was able to shoehorn in a disquisition on particular bit of wonkery that has always intrigued me—Gresham’s law. Here’s how Jenny explains it to Will Edwards, the book’s protagonist, when he hands her a silver dollar from 1876:

“Don’t you know what this is?”

Will shrugged. “It’s just an old silver dollar.”

“No, it’s more than that. It’s more than just what a dollar can buy, or the silver in it, or the beautiful engraving of Liberty enthroned beneath thirteen stars. It’s a trade dollar.”

“So?”

She tilted her head and looked at him. “Haven’t you ever heard of Gresham’s law, William?” It was a purely rhetorical question, for she continued on immediately: “It refers to the tendency for bad money to drive good money out of circulation. Gold and silver fluctuate in value depending on how much of them are on the market at any given time. In the 1870s, we had all those big silver strikes in Nevada, and silver flooded the market. That made silver into bad money … because there was more supply than there was demand. Because there was less gold and more silver, people spent silver and kept gold. Do you follow me?”

“Sure,” said Will, though he wasn’t entirely sure why they were taking the journey in the first place.

“Now this coin,” Jenny continued, holding it up to the light, “was created by a man named John Jay Knox—a San Francisco banker. He knew that there was a great demand for silver coins in Asia, especially China. So Mr. Knox created these—purely for export, mind you. Trade dollars.”

“But they started to show up in circulation here in the States, because silver producers—who still had far too much silver on their hands—could have their silver minted into trade dollars. And they didn’t bother sending them overseas, they just dumped them into the market. Over time, as more and more silver was found, and the price of silver decreased, their value just kept going down. At one point, the value had fallen so far you couldn’t get even eighty-six cents for this dollar! And employers, wise to this opportunity for arbitrage, began buying them at a discount and using them to pay their workers—Gresham’s law at work!”

After this, she fell into a silent contemplation of the coin, so entranced that Will finally had to snap his fingers in front of her face to get her attention. When her blue eyes rose to meet his, they were sharp and bright.

“So the point of your story,” he summarized, with a wry smile, “is that I should like this coin because it was created out of greed and became less and less valuable over time?”

“No,” she said. “I’m saying that you should respect it because it is fascinating. Because it makes you think about everything money really is. Money is the ability to do things—but only if you believe in it. And more importantly, if other people believe in it. What makes a silver dollar with eighty-six cents of silver in it worth eighty-six cents … when a pennyworth of paper printed by the United States Treasury is worth an actual dollar? Why will one give you more power to do things than the other?”

“I have no idea,” Will said. “Hey, weren’t we going to go find a hotel or something? Or are we going to spend our wedding night talking about John Jay Knox and the price of silver in China?”

There you have it! Not only did I get to explain Gresham’s law, I got to use the word “arbitrage.” Now, the only thing that stands between me and dying happy is writing scene explaining how the Bretton-Woods agreement of 1944 was an Illuminati conspiracy. But living that dream will just have to wait until my ongoing historical fantasy series finally gets to the 1940s, I guess.

M.K. Hobson’s debut novel, The Native Star—the first book in her Veneficas Americana series—was nominated for a Nebula award in 2010. She lives in the first city in the United States incorporated west of the Rockies. Her favorite writers are Theodore Dreiser, Sinclair Lewis, Booth Tarkington, Gore Vidal, and William S. Burroughs. The Warlock’s Curse is her third novel. You can find out more at her website, www.demimonde.com

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There you have it! Not only did I get to explain Gresham’s law, I got to use the word “arbitrage.”
I am reminded of Daniel Abraham, who is using banking and economics in his Dagger and the Coin series.